Demers v. Krabbenhoft

Securities fraud - Resource Development International Ponzi fraud - Whatcom County Superior Court

John Stark Staff  
Published: April 19, 2005
County people lost millions in investments

THE BELLINGHAM HERALD

4 face fines in finance scheme

The Washington Department of Financial Institutions is seeking to fine four Whatcom County residents for their involvement in Resource Development International, a financial scheme that cost investors millions.

Michael Stevenson, state securities administrator, said his department's action is not a criminal proceeding. Those named in the order alleging violations of state securities laws have a right to a hearing before an administrative law judge to argue why the fines should not be imposed, Stevenson said.

The state administrative order, filed late last week, names insurance agents Earl H. Dangelmaier and Thomas Krabbenhoft and accountant Richard Labadie, all of Bellingham, and insurance agent Sharyn Meenderinck of Everson.

The order seeks to levy $30,000 fines against Dangelmaier and Labadie, and $20,000 fines against Krabbenhoft and Meenderinck. All four are accused of selling RDI investments.

The state order contends that Dangelmaier, Krabbenhoft, Labadie and Meenderinck violated state law by selling RDI, a security not registered with the state as law requires.

Labadie and Meenderinck also violated the law by selling RDI even though they were not registered with the state to sell securities, the state agency contends.

Krabbenhoft and Dangelmaier did have securities licenses. But their RDI activities broke the law because they were licensed only to sell products on behalf of their employer, NYLife Securities Inc., and the RDI investment was not approved by NYLife, the state contends.

Dangelmaier said Monday that he had not yet had a chance to read the accusations in an order issued last week by the state agency. He reiterated early statements that he never intended to mislead investors in RDI. He said he has always tried to cooperate fully with state and federal regulators since the Tacoma-based company collapsed in 2002.

Others named in the state order did not respond to requests for comment.

Lloyd Martindale, one of a number of local investors who lost substantial sums to RDI, said in an e-mail message that he was pleased by the state action.

Stevenson said his agency is trying to send a message with the legal action. "The remedy of a fine here is not to punish them but to seek to change their conduct with respect to these kinds of laws," he said.